K eystoneBuilder A publication of the Pennsylvania Builders Association • www.PaBuilders.org • November/December 2009
WArninG shot Municipalities put on notice to halt excessive fees
INSIDE THIS ISSUE } Mechanics’ lien law modified to allow residential waivers } Builders Gala award applications available } Learn how PBA saves you money with rebates and workers’ compensation insurance
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Looking out for builders’ best interests
6 Warning shots in Halifax PBA puts municipal officials on notice that it will challenge any and all illegal fees
12 Rebating to savings Free rebate program has saved members more than $115,000
14 Workers’ compensation: Savings through membership PBA benefit saves money, time for members
16 Member spotlight Liberty Homes Custom Builders Inc.: Understanding what customers want
Member Insider
Keystone Builder
4 President’s message
Volume 6 • Issue 6 • November/December 2009
Since the Pennsylvania Construction Code Act was passed 10 years ago, problems have developed with how the code is updated and enforced. See page D of the Member Insider section for information about PBA’s ideas for improving the building code.
Member briefs . . . . . . . . . . . . . . . . . . . . . . A Homebuilders score with mechanics’ lien exemption . . . . . . . . . . C Hold the code . . . . . . . . . . . . . . . . . . . . . . . D
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Cover designed by Chris Anderson
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Keystone Builder cover designed by James Robinson
EXCL-247
Associate Vice President Jim Miller, Lancaster County BIA Secretary Ray Venema, West Branch Susquehanna BA Treasurer Joe Harcum, Wayne County BA Immediate Past President Ray Fertig, York BA Executive Vice President Doug Meshaw Editor Eric C. Wise Associate Editor Chris Anderson
PrintComm Staff Publisher Kevin Naughton Assistant Editor/Publication Director H.J. Hormel Graphic Design Jason Gabel Advertising Sales Manager Brenda Poe Advertising Sales Jeff Pinwar • 800-935-1592, ext. 118 Address correspondence to: Keystone Builder 600 North Twelfth Street Lemoyne, PA 17043 Phone: 800-692-7339 or 717-730-4380 Fax: 717-730-4396 Web: www.pabuilders.org E-mail: ewise@pabuilders.org Advertising does not imply acceptance or endorsement of the products contained in the publication.
President’s message
Vice President Joseph Mackey, Pocono BA
by Gene Kreitzer • PBA President
President Gene Kreitzer, Lebanon County BA
Looking out for builders’ best interests
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s 2009 winds down, Pennsylvania Builders Association has plenty of work ahead on issues vital to our industry that always seem to outlive the terms of your association presidents. The statewide Uniform Construction Code has easily been the biggest issue this year. In the spring, the new state Technical Review and Advisory Council met for the first time. The council debated many changes but did not eliminate any of building standards that were up for removal. PBA led the effort for the formation of the council, which has the responsibility to consider proposed changes to the building code and determine which may be appropriate for Pennsylvania. In addition, we have encountered other problems with the code, which you will find discussed on Page D of this issue. In short, there are many reasons PBA supports an effort to “Hold the Code,” extending use of the 2006 edition of the code for another three years. Although the code-related issues remain unresolved as this issue goes to press, PBA made important strides this year on other fronts. As you will see in our cover story, “Warning shots in Halifax,” PBA teamed up with the Home Builders Association of Metro Harrisburg in support of member Gary Lenker, who challenged excessive fees in Halifax Township. When municipal officials impose fees to pad their coffers – rather than cover actual expenses – it’s a problem for us. That’s why PBA has promised to challenge fees that are improperly imposed. Finally, 2009 saw the passage of an update to the Mechanics’ Lien Act that allows general contractors to require lien waivers from subcontractors for residential projects of three or fewer stories. Read Page C to find out more about this legislative victory that PBA strongly supported. Rest assured that your association will continue to work hard for you on issues affecting your business in the coming year. It’s been a privilege and an honor to serve as your 2009 PBA president, and I wish you the best in 2010. s
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2929 Davison Rd. • Flint, MI 48506 Phone: 800-935-1592 • www.printcomm.com An Exclusive Publication of the PBA Keystone Builder magazine is published six times a year by the Pennsylvania Builders Association®, Editorial Offices, 600 North Twelfth Street, Lemoyne, PA 17043. With the exception of official association announcements, the statements of fact and opinion that are made herein are the responsibility of the authors alone and do not reflect an opinion or philosophy of the officers or the membership of the PBA. Materials may not be reproduced without written permission from the PBA headquarters. POSTMASTER: Send address changes to Pennsylvania Builders Association, 600 North Twelfth Street, Lemoyne, PA 17043. SUBSCRIPTIONS: Subscriptions available through membership to the Pennsylvania Builders Association.
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I Keystone Builder • November/December 2009
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Gary Lenker (right) presented his homeowners (from left) Ron Stahl, Kristopher Phillips, Michele Weaver and Steven Schreffler with their refund checks in August.
Warning shots in Halifax PBA puts municipal officials on notice that it will challenge any and all illegal fees by M.H. Morrison he tenacity of one Pennsylvania builder has saved thousands of dollars for families in Halifax Township. Gary Lenker, vice president and director of operations for Donco Construction in Dauphin County, with the help of Pennsylvania Builders Association and Home Builders Association of Metropolitan Harrisburg successfully challenged Halifax Township’s building permit fee. This led to the township changing its policy and returning $7,803.90 to Lenker. “We felt obligated to return the money to the people who bought the homes and that’s what we did.” Lenker said that his company does all it can to keep new homes affordable and excessive government fees can be a barrier to homeownership.
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Disputed fee The questionable building permit fees were levied for new homes built in Halifax Township, Dauphin County, from November 2005 to December 2008. 6
Lenker said that he understood the $1,200 to $1,500 fee he was charged – a fee allowed under the Pennsylvania Construction Code Act. What he questioned was the hundreds of dollars in additional charges from the township for the building permits. He started reading the township’s minutes to understand how and why the building permit fee was being charged. He discovered in the minutes that the township imposed the new fees to offset the cost of updating the Act 537 plan. Lenker knew this was illegal, so he contacted PBA. Specifically, the township was charging applicants $25 for the first $1,000 of a planned home’s estimated value and $3 for each additional $1,000 in value. The legality of those permit fees was challenged because the fees were intended to cover more than just the administrative cost of issuing the permits. Additionally, the township was charging fees that were supposed to be replaced by UCC fees when it went into effect in 2004. But the township continued charging the old fees with the new building-related fees. Continued on page 8
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Warning shots in halifax Continued from page 6
“In the case of Halifax Township, we were fortunate that we were able to resolve the dispute amicably and without litigation,� said Scott Elliott, public relations director for PBA. “The supervisors there understood what they were doing was wrong and took immediate action to correct the situation. However, in future cases, PBA will not hesitate to mount a legal challenge, if necessary, to protect new homebuyers.� The final resolution agreed to by the township and PBA was a $25 administrative fee for building permits.
Municipalities on notice
Two local television stations interviewed Halifax homeowner Steven Schreffler about his refund following the news conference.
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“We are asking any builders or consumers who think they may have been charged excessive fees during the construction or remodeling of homes to please contact us [PBA] with their stories,� said Ray Fertig, PBA’s 2008 president, during a recent press conference. “Excessive building fees are nothing more than illegal taxes,� Fertig continued.
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Gary Lenker discussed the illegal fees during a news conference.
“PBA will lead challenges against these illegal practices. Local governments are hereby notified that if they are levying illegal building fees, we are watching and, on behalf of our homebuilding customers, we will challenge these activities.” With the ongoing attention paid to the Halifax situation, Elliott said he wouldn’t be surprised if municipalities are taking another look at their building permit fees. “We may never hear of those local governments that are making changes. But that’s okay. What’s important is that the changes are made. Responsible governments will recognize and make the appropriate changes,” Elliott said. He agreed with Fertig that for PBA to investigate these issues builders and homeowners need to come forward. “The best advice I can give is that if a new homebuyer or homebuilder suspects that building permit fees are higher than what seems to be reasonable for an administrative charge, they should call PBA with their information. Our staff will investigate to determine if their case has merit,” Elliott said.
Fighting the good fight Lenker said ferreting out the excessive fee and fighting the township was “absolutely worth it.” His company did receive nearly $8,000 in returned fees, but what was more important, was that Donco was able to pass that money along to homeowners. A total of 24 families eventually will benefit from this challenge in Halifax Township. “Affordable housing is one of PBA’s cornerstone principles. We fight every day to protect property rights and affordable housing in Pennsylvania. Plus, new homebuyers are our customers, and we frequently speak out on their behalf. I think you would be hard pressed to find another group in Pennsylvania that fights as hard for new home consumers as PBA,” Elliott said. s
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November/December 2009 • Keystone Builder
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A little bragging can go a long way Enter to win a PBA award and use the honor to boost business and bolster your reputation.
2009 Builders
GALA
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PBA Builders Gala award applications are now available at www.PaBuilders.org. Eight award categories give you the chance to show off to your peers and potential customers and truly refer to yourself as the “best in state.� Deadline to apply is Jan. 4. For more, visit www.PaBuilders.org or call Chris at 800-692-7339, ext. 3011. 10/20/09 2:08:41 PM
MemberInsider November/December 2009
Member briefs
Reach homebuilders with your green-building products and services
PBA reaches agreement with state on green building standards
If your company sells green products or services to homebuilders, there’s no better way to reach that targeted audience than through PBA’s Premier Partner sponsor program. A special category has been created for green companies who want to reach homebuilders, remodelers and others associated with residential construction in Pennsylvania. A Premier Partner sponsorship provides great exposure, supports your state homebuilders association and is extremely affordable. Call Bill Lapitsky to learn about the attractive sponsorship rates now available for green companies. He can be reached at blapitsky@PaBuilders.org or 800-692-7339, ext. 3030.
PBA recently concluded successful negotiations with the state Department of Environmental Protection on the development of standards for the state’s $25 million funding program for high-performance green buildings. The program is administered by the Commonwealth Financing Authority and funds residential and commercial green building projects. The department had intended to create a LEED-only standard for green building projects under the program. However, months of effort by PBA members and staff (with assistance from the NAHB Research Center and staff from the caucuses of the Pennsylvania General Assembly) forced the department to re-draft the standards in a way that recognizes green building projects utilizing the ICC/NAHB National Green Building Standard. More importantly, PBA’s efforts on this issue have also created a precedent for any future state standards related to residential green building, as it is absolutely essential that the NGBS be recognized as a qualifying program under such future standards.
Ignore bogus invoices from deceptive sources
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PBA reminds members that the association produces no statewide directory or publication for which they will be invoiced. Some members have reported receiving invoices for “black books” or other directories. PBA has been unable to find any member who signed up for such a service and is unable to confirm that such a product is being produced. Regardless of any deceptive markings on an invoice or envelope, PBA and NAHB do not invoice members directly for dues, nor does either organization invoice members for unwanted items. In addition to invoices received through postal mail, e-mail solicitations for payment should be reviewed carefully. PBA does not send any invoices by e-mail. For this reason, PBA urges members to verify the source and legitimacy of any organization requesting payment or account information using electronic communication. Please contact your local builders association’s executive officer if you receive any suspicious requests for payments from the builders association.
HIC update: What to do about unregistered contractors PBA encourages members to contact the Attorney General’s office with information about any contractor who is performing work and is not registered with the state. The AG’s office is asking members to e-mail information to hic@attorneygeneral.gov, regarding unregistered contractors. The AG’s office is reviewing these e-mails as part of the enforcement process. Continued on page C
Member Insider • Keystone Builder
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You only benefit from those member benefits you use PBA can be a vital part of your personal and professional success. Your association offers numerous benefits that your member dues make possible. So it’s in your best interest to use them. Just a few include • Networking opportunities with the most successful business leaders in your community • PBA’s Member Rebate Program pays cash back to builders who use products from nationally known manufacturers • On-staff experts stand ready to help with issues from the UCC to environmental regulations • Your member web site offers 24-hour access to housing data like county building permit stats • Special councils focus on the special needs of associate and developer members
• Our workers’ compensation plan is expanding because of its highly competitive rates • Free use of the PA One-Call system before you dig • A pioneering health insurance program offering great features at affordable rates • Various professional education seminars • Government affairs experts at work in the legislature protecting and promoting the housing industry • Free subscriptions to high-quality PBA publications If you want to hammer out a plan for success, your PBA member benefits are the best tool at your disposal.
PBA staff is ready to help with any question you have
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From member benefits to web site logins, legislative issues to building codes, PBA’s staff has the answer you need. Contact us at 717-730-4380 or 800-692-7339. Or, fax us at 717-730-4396.
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Chris Anderson, communications coordinator ext. 3011, canderson@PaBuilders.org
Jonathan Grella, chief financial officer ext. 3024, jgrella@PaBuilders.org
Eric Wise, publications coordinator ext. 3003, ewise@PaBuilders.org
Mary Ann Jackson, assistant to the EVP ext. 3019, mjackson@PaBuilders.org
Rob Milne, director of business operations ext. 3015 rmilne@PaBuilders.org
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Louis J. Biacchi, government affairs director ext. 3018, lbiacchi@PaBuilders.org
Jerry Leach, director of building codes ext. 3012, jleach@PaBuilders.org
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Jill Pento, legislative assistant ext. 3028, jpento@PaBuilders.org
Arlene Miller, director of AMS ext. 3020, amiller@PaBuilders.org
Grant Gulibon, regulatory specialist ext. 3013, ggulibon@PaBuilders.org
Sally Paff, accountant ext. 3021, spaff@PaBuilders.org
Scott Elliott, public relations director ext. 3010, selliott@PaBuilders.org
Livvy Harmon, office operations manager ext. 3016, lharmon@PaBuilders.org
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PBA’s home on the web lets members track housing issues, access builders’ resources and grow their business! The site contains up-to-date industry and association news, plus links to all the benefits your membership includes.
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I Keystone Builder • Member Insider
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Doug Meshaw, executive vice president ext. 3007, dmeshaw@PaBuilders.org
Visit us online at www.PaBuilders.org
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To learn more, contact PBA at 717730-4380 or 800-692-7339. Ask for our member benefits brochure.
More benefits also available at www.PaBuilders.org
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Homebuilders score with mechanics’ lien exemption by M.H. Morrison he state legislature decided to update the Mechanics’ Lien Law in 2006 with a major rewrite, decades after the passage of law’s prior version. Unfortunately, they also added provisions that created nightmare scenarios for homeowners, but Pennsylvania Builders Association was able to change those provisions. Lou Biacchi, PBA director of governmental affairs, explained that as originally written, the Mechanics’ Lien law allowed a builder to strip, or waive, the lien rights of subcontractors and similar business further down the “economic feeding chain.” When this waiver was implemented, if there was a dispute about payment between a builder and a subcontractor, that subcontractor could not put a lien on the property in an effort to recoup the amount of money owed. This law also prevented those who were owed money from the subcontractor from putting a lien on the property, too. The result was that the original law made it less likely that the homeowner would become embroiled in such a payment dispute. “Inside PBA, we liked the law the way it was written,” Biacchi said. The 2006 changes to the Mechanic’s Lien Law, which became known as Act 52, went into effect at the beginning of 2007. While the revisions were created to protect the construction trade unions on large commercial projects, they also unwittingly affected residential construction projects. In this rewrite, there was a requirement that the waiving of lien rights were not allowed on construction contracts that had a dollar value greater than $1 million. While it was thought this would limit the application of the law just to commercial construction, it didn’t. Biacchi explained that builders often create loan packages and projects that exceed $1 million in order to build more than one home at a time.
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As the economy slowed, PBA heard more frequently that builders were experiencing situations in which subcontractors’ suppliers were filing liens against homes under construction due to alleged non-payment. In these circumstances, builders had made full payment to these subcontractors, and there was no contractual relationship between the builder and the subcontractor’s suppliers. Under the 2006 changes, when this sort of dispute arose, a lien was allowed, and the pending litigation could take years to resolve. While most builders do pay their subcontractors and suppliers in a timely manner, the depressed homebuilding market hit some builders hard financially, and raised the likelihood of more liens on new residential construction, Biacchi added. Since it was possible that liens might not be filed until months after a family settled on their new home, there was no mechanism in place for a title search company to detect an impending lien. The end result was that Pennsylvania homeowners were more vulnerable to liens that were essentially “invisible” to title search companies. So, at the urging of PBA and with its input, Act 34 was created and signed into law in August. It took effect Oct. 10. This new act corrected the problem of the monetary cap by stating that any residential construction project of three stories or less (not including the basement) was excluded from the regulations that prevent builders from waiving the lien rights of subcontractors and others on the project. With these changes, which were prompted by PBA, once again innocent homeowners are protected from liens that have nothing to do with them or their actions, other than purchasing a new home in good faith.
member briefs Continued from page A
NAHB calls for tax credit extension
Hammers and Gavels Club looking for members
The federal $8,000 tax credit for new home sales led to 357,000 homes sold from Feb. 17 to Sept. 15, according to a study released recently by Campbell Surveys of Washington, D.C. New home sales accounted for 42 percent of all home sales during the seven-month span, compared with 32 percent in the months prior to the introduction of the tax credit. The National Association of Realtors reported that the 2008 first-time homebuyers tax credit, which must be repaid, was responsible for 560,000 sales. The Realtors and NAHB are united in supporting an extension and expansion of the 2009 incentive, which expires Nov. 30. Visit the NAHB web site at nahb.org for more information about the association’s effort to get the credit extended and expanded.
Want to make a difference for the homebuilding industry? If you are motivated by the idea of improving the field for yourself and others, then the Hammers and Gavels Club needs you. As a member, you will use your existing relationships and cultivate new ones with state legislators. In doing so, you will help the industry by relaying our position to those who determine what laws get passed. You could be the one who influences your state representative or senator to change things for the good of all PBA members. If you are interested in carrying the voice of the housing industry, contact Jill Pento at 800-692-7339, ext. 3028, or e-mail jpento@PaBuilders.org. Member Insider • Keystone Builder
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Hold the code!
PBA says: Revise code development process, keep 2006 codes in place
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by M.H. Morrison hen the state’s Uniform Construction Code went into effect in 2004, it was viewed as a positive development for Pennsylvania. For the first time, the code provided uniformity of building regulations across the state and ensured a baseline of performance for new home construction. However, unanticipated was the expense incurred with the major changes brought about by updating the code every three years. With the current economy, these costs are even more burdensome for municipalities, homeowners and builders. Expenses include the code books themselves, training of the work force and the inspectors, and additional products needed in homes to comply with the new codes. The situation led the Pennsylvania Builders Association to support extending the current UCC 2006 standards until there can be a complete and thorough review of the code development process. In the case of Pennsylvania, PBA is urging legislators and others interested in maintaining safe construction to take the next three years to evaluate and determine how the codes process can best function to produce a cost-effective, reasonable and rational building code moving forward. “Our goal is to ensure that by 2012 we have a revised building code development process that not only provides quality home construction, but also affordability for the municipalities, builders and new home consumers affected by the code,” said PBA President Gene Kreitzer. PBA has already been joined by the Pennsylvania Association of Realtors, the Pennsylvania Manufactured Housing Association, the Modular Building Systems Association and the Pennsylvania State Association of Township Supervisors in a coalition known as the Partnership for a Reasonable Building Code in PA. The group is supporting House Bill 1808 (whose main sponsor is Rep. Ron Buxton, D-Dauphin), which would keep the existing building code in place until Dec. 31, 2012. During the three-year period until the 2012 code is available, PBA wants to work with state officials to improve the process for adopting code changes.
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While there is currently an advisory panel that reviews code changes, PBA and others have found that this panel has not been aggressive in eliminating needless, superfluous and onerous code requirements. While some of these changes appeared fairly minor, when added together, the new requirements have added up to increased costs for homebuyers. Just take the price tag for the 2009 UCC. Based on estimates by code experts like PBA’s Doug Meshaw, the proposed 2009 building code standards would add $10,000 to the cost of a new home. In a report from NAHB on the impact of government regulation, it was pointed out for every $1,000 increase in the cost of a new median-priced home, 217,000 prospective buyers would be forced out of the marketplace for that home. Using this report, it could be predicted that a $10,000 increase would force more than 2 million prospective buyers out of the marketplace. With the state’s homebuilding industry still in deep recession, the shrinking of the potential homebuyer pool could be devastating, PBA officials have pointed out. PBA officials maintain that new homebuilding is vital to the state’s economic recovery. Additional state regulations that make new homes less affordable will slow the recovery of the housing sector and, in turn, bog down the entire state economy. Across the country every state handles the codes issue differently, and Pennsylvania is not the only state to hold off on changes to its code. According to NAHB research, not all states using the code routinely adopt each edition every three years. In 2009, Minnesota opted to skip the 2009 edition entirely. In some other states, local municipalities make the decision. In other cases, states adopted the 2009 code without certain onerous provisions, like Pennsylvania did when it repealed anchor-bolt requirements in the 2006 International Residential Code. “Now is not the time for expensive and unnecessary changes to Pennsylvania’s building code,” Kreitzer said.
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RelyRely on on thethe strength, strength, stability stability andand expertise expertise of Wells of Wells Fargo Fargo Home Home Mortgage Mortgage to to address address youryour buyers’ buyers’ financing financing needs. needs. With With value-added value-added programs, programs, sound sound lending lending practices practices andand industry-leading industry-leading newnew construction construction products, products, ourour goalgoal is tois provide to provide youryour team team thethe convenience convenience of aofsingle, a single, trusted trusted professional professional withwith access access to the to the rightright products products andand programs programs to help to help youyou Drive Drive more more traffic. traffic. sellsell more more Homes. Homes. Contact Contact Chris Chris Kulp, Kulp, Regional Regional Builder Builder Sales Sales Manager, Manager, at 215-529-0416 at 215-529-0416 for for more more information. information. Silver Silver level level sponsors sponsors
ProBuild ProBuild is dedicated is dedicated to the to the success success of the of the home home building building industry. industry. TheThe company’s company’s involvement involvement at the at the national, national, state state andand locallocal builders builders association association is extremely is extremely important important to ProBuild to ProBuild andand willwill continue continue to grow. to grow. ProBuild ProBuild hashas been, been, andand willwill always always be,be, on on thethe cutting cutting edge edge of new of new products products andand services, services, as as wellwell as as providing providing technical technical andand building building industry industry knowledge. knowledge. ProBuild ProBuild sales sales representatives representatives areare thoroughly thoroughly trained trained in green in green building building products products andand cancan assist assist youyou in achieving in achieving youryour NAHB NAHB or or LEED LEED green green certification. certification. ForFor more more information, information, please please contact contact Michael Michael Kurpiel, Kurpiel, C.G.A, C.G.A, C.G.P., C.G.P., market market development development manager, manager, at 800-883-8800, at 800-883-8800, extext 665, 665, or e-mail or e-mail mike.kurpiel@probuild.com. mike.kurpiel@probuild.com.
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PBaPBa is grateful is grateful thatthat First First National National Bank Bank recently recently renewed renewed its silver-level its silver-level Premier Premier Partner Partner sponsorship sponsorship for for another another year. year. on on hand hand for for the the check check presentation presentation at aatmcNaughton a mcNaughton Homes Homes sitesite werewere (l-r) (l-r) Bill Bill lapitsky, lapitsky, Premier Premier Partner Partner program program coordinator; coordinator; vickivicki shannon, shannon, executive executive vicevice president, president, mcNaughton mcNaughton Homes; Homes; gene gene kreitzer, kreitzer, PBaPBa president; president; lloyd lloyd lamm, lamm, regional regional president president of First of First National National Bank’s Bank’s capital capital region; region; andand craig craig ray,ray, vicevice president president of business of business development development andand private private banking, banking, FirstFirst National National Bank. Bank. to learn to learn howhow youryour company company cancan become become a PBa a PBa Premier Premier Partner Partner andand gaingain vitalvital exposure exposure to the to the state’s state’s homebuilding homebuilding industry, industry, callcall Bill Bill lapitsky lapitsky at 800-692-7339, at 800-692-7339, ext.ext. 3030. 3030.
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Close Close thethe dealdeal by by helping helping youryour customers customers obtain obtain financing financing through through PHFA. PHFA.With With flexible flexible underwriting underwriting guidelines, guidelines, fewer fewer fees, fees, 210210 dayday raterate locks locks andand closing closing costcost assistance, assistance, PHFA PHFA cancan helphelp youryour buyers buyers finance finance theirtheir dream. dream. Programs Programs areare alsoalso available available to fund to fund home home renovations renovations andand repairs! repairs!
Residential Residential Warranty Warranty Company, Company, LLC,LLC, is aisleading a leading provider provider of written, of written, insured insured warranties warranties to builders to builders andand remodelers remodelers nationwide. nationwide. Since Since 1981, 1981, RWC RWC hashas issued issued overover 2.52.5 million million warranties warranties andand is an is an expert expert in the in the fieldfield of risk of risk management. management. RWC RWC offers offers a wide a wide range range of products of products andand services services to meet to meet various various industry industry needs needs including including its its HUD-accepted HUD-accepted 1010 YearYear standard standard warranty warranty for for FHAFHA andand VA VA financing, financing, customized customized state state warranties, warranties, general general liability liability insurance insurance for for builders builders andand
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Total Total Access Access is the is the tri-state tri-state leader leader in accessibility in accessibility equipment, equipment, elevators elevators andand all all lifting lifting products. products. All All ourour consultants consultants areare factory-trained factory-trained to give to give youyou thethe bestbest solutions solutions for for anyany need need or want or want based based on on thethe situation situation youyou maymay be be in. in. All All products products thatthat wewe sellsell wewe install install andand service service withwith all all Total Total Access Access direct direct employees. employees. Please Please visitvisit ourour website website to see to see all all of of ourour products products andand services services thatthat wewe have have to offer. to offer. Premier Premier Partner Partner Green Green sponsor sponsor
Combining Combining thethe strength strength andand performance performance of cold-formed of cold-formed steel steel framing framing withwith thethe superior superior insulation insulation properties properties of expanded of expanded polystyrene, polystyrene, thethe accel-E™ accel-E™ Steel Steel Thermal Thermal Efficient Efficient Panel Panel (STEP) (STEP) wallwall system, system, simplifies simplifies framing, framing, insulation insulation andand sheathing sheathing to one to one process. process. ThisThis reduces reduces labor labor costs costs andand shortens shortens thethe construction construction cycle. cycle. TheThe accel-E™ accel-E™ wallwall system system from from ACCELERATED ACCELERATED Building Building Technologies Technologies provides provides exceptional exceptional energy energy efficiency efficiency while while virtually virtually eliminating eliminating unwanted unwanted air air infiltration infiltration andand drafts. drafts.
For more information on the PBA Premier Partners program, please contact Bil Lapitsky at PBA at 800-692-7339, ext. 3030, or via e-mail at blapitsky@PaBuilders.org.
ForFor more more information information on the on the PBAPBA Premier Premier Partners Partners program, program, please please contact contact Bill Bill Lapitsky Lapitsky at PBA at PBA at 800-692-7339, at 800-692-7339, ext.ext. 3030, 3030, or via or via e-mail e-mail at blapitsky@PaBuilders.org. at blapitsky@PaBuilders.org. November/December 2009 • Keystone Builder
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Rebating to savings by M.H. Morrison ince Pennsylvania Builders Association’s Member Rebate Program began, more than $115,000 has been returned to members. Not bad for a program that comes at no extra charge with membership and includes products that many builders already purchase. Jason Barshinger, co-owner of Embee & Son in York, said that he has used the program since its inception. “It’s free money. I already used these products, and it just reinforced for me to keep using them,” he said. “If you have any items to submit for a refund, do it. It’s simple. Take the free money from the people you’ve been buying.” The program is a free member benefit that is available to all active builder and remodeler members of PBA. From its beginning through the second quarter of 2009, the Member Rebate Program has paid 119 active PBA members a total of $115,451.99, for an average of $970.18 per participant. Rich Robinson, program administrator for the PBA Member Rebate Program, explained that no receipts are necessary (except for Progress Lighting) to process the rebates. Manufacturer salespersons verify the information through their distribution. This makes the paperwork simple and requires minimal time. There are three ways to easily claim rebates. 1. Fill out the claim forms for each home. This is the easiest way for members with only a few homes eligible for rebates and the products used in each home differ greatly. 2. Fill out one form and send in a list of closed homes. This works well if the same products are used in each home. 3. Commit to using certain products in every home. For this, the member must sign a commitment agreement and once completed, he or she does not have to fill out the forms each quarter but simply sends in the closings. In addition to the ease of this option, the amount of the rebate will increase because of the committed loyalty. Commitment agreements are available from program administrators. A member can register for the PBA Member Rebate Program either through the PBA web site at PaBuilders.org or by contacting Chris Anderson at PBA by calling 800-692-7339, ext. 3011. Robinson said that the program’s web site provides all of the current information and is updated often. Once a member registers for the program, they receive updated rebate claim forms after each quarter has closed. Donna Whaley, who works in accounting at Stuart E. Price & Co. of Horsham said, “It does not take much time each quarter, and you do receive rebates from products that you already use.” s
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Nine manufacturers join PBA Member Rebate Program
Recently nine manufacturers have been added to the PBA Member Rebate Program. The following is the updated list (at press time) of participating manufacturers: 1. Bradford White 2. Bryant 3. C.H.I. Overhead Doors 4. Carrier 5. Crane Performance Siding 6. Daltile 7. Delta 8. Eldorado Stone 9. Evermark Wood Doors 10. Heat & Glo 11. Heatilator 12. Honeywell Comfort Solutions 13. Honeywell Security 14. Honeywell Structured Wiring 15. Jacuzzi 16. Lutron 17. Mansfield Plumbing 18. Monarch Paints 19. Pittsburgh Paints 20. Porter Paints 21. Progress Lighting 22. Therma-Tru Doors 23. TimberTech 24. TimberTech FenceScape 25. Velux Skylights 26. Warmly Yours 27. Zurn Pex Plumbing & Radiant Heating Systems Please note: The list of manufacturers was accurate as of October 2009. For the most up-to-date list visit the PBA web site at PaBuilders.org.
I Keystone Builder • November/December 2009
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Re:Build Re:Connect Re:Focus 2010
NAHB International Builders’ Show®
For the first time ever, NAHB Members can receive a 4-day exhibit registration at NO COST! That means that for four days, you can attend the building industry’s largest event for FREE.* This is a $125 value and will put you face to face with the hottest suppliers in the industry! Register at BuildersShow.com today! *Register by December 11, 2009. After December 11th there will be a $75 charge that will then jump to the onsite price of $125 after January 18th.
January 19-22, 2010 | Las Vegas | BuildersShow.com
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Workers’ compensation: Saving through membership by M.H. Morrison hrough an exclusive agreement with Eastern Alliance Insurance Group and E.K. McConkey & Co., Pennsylvania Builders Association members can receive discounted rates for workers’ compensation insurance. The savings from this PBA-owned workers compensation program has been a membership benefit for more than a decade. In the current economy, this member benefit is not only another reason to maintain ties with PBA, but also is another way for members to stay competitive. In addition to the PBA Workers Comp Program’s competitive, market-driven workers’ compensation rates, the adjusters at Eastern Alliance Insurance Group can help members reduce workers’ compensation claims and minimize the costs when a claim is made, according to John Olkowski, an account executive with McConkey. To a great extent, the cost of workers’ compensation insurance is driven by claims. Olkowski said that many employers may already know this, but what they may not realize is that a claim is not a fixed cost and the amount of money each claim will cost an employer varies based on their choice of insurance provider who handles those claims. Eastern Alliance Insurance Group, the insurance carrier for the PBA program, reduces the overall costs of a claim by 39.6 percent, compared to the state’s average insurance company. This is attributed, in part, to the fact that their claims representatives handle 48 percent fewer claims than the average Pennsylvania insurance company’s claim representative, Olkowski explained. Also, Eastern Alliance works very closely with employers to monitor and fight against fraudulent claims as well as entering into cost savings agreements with medical providers, he added. Many insurance carriers offer competitive workers’ compensation rates for one or two years, Olkowski said, then either increase those rates or fail to stay competitive in the marketplace by not decreasing rates, unless carefully scrutinized. This leads to the employer paying more upfront as well as wasting administrative time and money by going again and again through the process of “shopping” insurance companies to determine if that company is the most competitive. Since the PBA program provides competitive rates year in and year out, the administrative costs are reduced and longterm savings increased, Olkowski said. Lou Tepes of Tepes Construction Co. in Northampton has been using the PBA workers’ compensation program for a decade. He works with his local agent, Bill Mulhern of Hampson Mowrer Kreitz Insurance, to get a great deal, which he estimates has saved him 30 percent over other workers’ compensation insurance. “By law you have to carry workman’s comp, no matter who it’s with. Coordinating it through PBA supports our own association. These people [agents coordinating with PBA] will find the best deal for us because of our group size,” Tepes said.
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“By law you have to carry workman’s comp, no matter who it’s with. Coordinating it through PBA supports our own association.” — Lou Tepes of Tepes Construction Co. To provide even more savings in terms of time and hassle, the program now offers Eastern Alliance’s ParallelPay, which is a pay-as-you-go product that allows builders and those the building industry to their pay workers’ compensation premium one payroll period at a time. “ParallelPay is a tremendous benefit to builders and those the building industry who are looking to remove surprise audits, eliminate large down payments, eliminate installment fees and pay premiums when there is work and cash flow as opposed to paying large sums when business is slow,” Olkowski explained. To use the program, members can keep their current payroll system, work with one of Eastern Alliance’s preferred payroll providers or manually key-in payroll census data online. The program does not require large sums upfront for the workers’ compensation premium. Instead, premiums will be paid as employees are paid. Overall, PBA members benefit when they join together in programs like the one for workers’ compensation insurance. “If a member has not looked at this as a viable option to their workers’ compensation, we would urge them to genuinely look at the costs to determine for themselves how much they will save due to competitive rates each year, better payment options and better claims handling,” Olkowski said. s
I Keystone Builder • November/December 2009
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November/December 2009 • Keystone Builder
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Member spotlight
Liberty Homes Custom Builders Inc. Understanding what customers want
by T.W. Burger ne of John Holahan III’s customers wanted a house with concrete walls a foot thick and slots at strategic intervals through which he could fire a rifle – should the need ever arise. The man got what he wanted. That’s the business. Holahan wasn’t always a homebuilder. “I was actually in retail management and sales prior to that,” he said. “I owned a burglar-fire alarm business and was trying to get Liberty Homes to sell my systems for the houses they built.” One thing led to another, and pretty soon Holahan was selling Liberty Homes. In 1995, he and Frank Repholz Jr., Liberty’s production foreman, took over ownership of the company. Holahan said he relishes interacting with people, and that’s a big help. “You get to know people pretty well when you’re putting them into a house,” he said. “Some want to show off, others are looking for a place of comfort and safety. Understanding people is what keeps all of us here doing that … You’re in there and the kids are running around saying this is my room, imagining what it’s all going to be like. That’s what drives anybody in this business. You are a part of a bigger machine, and you create something tangible that you can look at and feel, and in the end, you’ve got a family living there.” While the job has its pressures, Holahan, 56, says he can’t see himself retiring. “Not because I won’t have the ability, but this can be fun,” he said.
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With a little help He said the most important thing he has learned in the business is that it’s nearly impossible to do everything on your own. 16
“As an entrepreneur, you tend to want to manage the whole thing. When you get to a certain level, you need to do what you’re good at, set the direction of the ship and let some other people do the rowing and those types of things,” he said. “I have been able to bring people into our team that, where I’m weak, they’re strong.” For example, some years back Liberty Homes hired a business coach, a CPA named Mike McCool. His task, Holahan said, was to look at the big picture, while the rest of the team handled the day-to-day operations. “He looks at it from 10,000 feet, and he’s been a great help,” Holahan said. “We hired him when things were going so well Continued on page 18
Business quick facts: Liberty Homes Custom Builders Inc. • Years in business: 31 • Area of Operation: Pocono Mountains of northeastern Pennsylvania and parts of New York, New Jersey and Delaware John Holahan III • Local Associations: Pocono BA, the BIA of Northeastern Pennsylvania and the Carbon BA • Association Involvement: Holahan served as president of Pocono BA (1993-1995) and is a PBA life director. • Awards Won: Holahan was 2008 Builder of the Year and Hammers and Gavels award winner in 1996. • Community Involvement: Active member of The National Federation of Independent Business, The Chamber of Commerce, The Pocono Mountains Vacation Bureau and The Penn State Housing Research Center. Holahan also serves on the leadership advisory council for the Pennsylvania Housing Research Center at Penn State University. • Web Site: www.libertyhomespa.com
I Keystone Builder • November/December 2009
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November/December 2009 • Keystone Builder
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member spotlight Continued from page 16
that I was afraid I didn’t have a handle on all that business coming in. You can screw up with too much business as well as with too little. Mike watches the markets and trends. He made sure we were insulated against the turn-down. We had absolutely no debt.” Even so, hindsight being 20-20, there are some things he would have done differently. “As we saw the market moving, I don’t think we moved fast enough. Some of the internal things we could have done faster. We still remain profitable, but our internal processes weren’t up to what they needed to be,” he said, adding that tough times are good in that you can tell what a company is made of. “The past couple of years, we were outselling our production capacity. It was all low-hanging fruit. Now, well, it tests your mettle. It’s definitely a way to learn if you’re meant for this,” he said. “Anybody can steer a ship in calm seas.”
Getting involved in the association Holahan said signing on with PBA was one of the best moves Liberty made. “This business was doing well before I started with it because things were busy,” Holahan said. “It was hard to screw up. But it really started to do well when I convinced the previous owners to get involved with PBA, to network with these other guys. When we took ownership, PBA gave me the tools I needed
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to run the business. It opened up a lot of networking, helped me find out how things should be done. … Anybody that doesn’t join is really setting themselves up for difficulties they don’t need to experience.” s
I Keystone Builder • November/December 2009
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